SoundHound AI (NASDAQ:SOUN) stock began the week much like it ended the last – by piling on the gains. The shares have jumped ~50% over three sessions, fueled by an impressive quarterly performance.
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That surge was underpinned by a classic beat-and-raise showing from the voice AI specialist – and H.C. Wainwright analyst Scott Buck says the rally is well deserved.
“We view the positive reaction in shares as warranted as the company demonstrates its ability to grow organically through new contract wins and expansion of wallet share within the existing customer footprint,” Buck said. “We believe this positive momentum will continue through the remainder of 2025 and likely into 2026.”
The numbers back up that optimism. In 2Q25, SoundHound delivered $42.7 million in revenue, far ahead of Buck’s $33.4 million forecast and representing a 217.1% year-over-year increase. This growth reflected both recent acquisitions and stronger organic performance. GAAP gross margin improved sequentially to 39% from 36.5% but remained below the 63% seen a year ago due to the lower-margin nature of newly acquired businesses.
Buck believes that margin compression is temporary and expects a return to “historical levels” as integration progresses. With revenue still expanding and margins set to recover, he sees the company reaching positive adjusted EBITDA in 4Q25 – and potentially for the full year 2026 – marking a critical inflection point. In the meantime, the analyst anticipates continued success with the company’s “land and expand” strategy to fuel organic growth.
Those expectations are reflected in Buck’s updated model. He now forecasts 2025 revenue of $165.0 million, slightly above his prior estimate and within management’s $160.0 million–$178.0 million guidance range. His adjusted EBITDA outlook calls for a $48.4 million loss in 2025, but crucially includes a $0.6 million profit in Q4. For 2026, he projects $220.0 million in revenue and $5.5 million in adjusted EBITDA, noting that visibility into next year should improve as the company scales.
“As the company announces favorable 2H25 results and potentially shares its initial outlook for 2026, we expect SOUN shares to move higher,” Buck summed up.
In line with that view, Buck assigns SOUN shares with a Buy rating and an $18 price target, suggesting a 13% upside from current levels. (To watch Buck’s track record, click here)
Across Wall Street, the view is more tempered, with 4 other Buys and 2 Holds combining for a Moderate Buy consensus. The $15.29 average price target implies shares could trade 4% lower a year from now. Watch out for either price target hikes, or conversely, rating downgrades from other analysts. (See SOUN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.